THE African Development Bank (AfDB) has granted approval for a $107.8 million loan to Tanzania, aimed at strengthening governance, promoting industrial competitiveness, and reinforcing social inclusion. The loan will support Tanzania’s Economic Competitiveness and Social Inclusion Programme (ECSIP), which seeks to facilitate the country’s sustainable recovery from the impacts of the Covid-19 pandemic and the ongoing crisis in Ukraine.
The ECSIP comp
rises three key components: implementing reforms to enhance domestic resource mobilization and strengthen public expenditure and procurement systems, improving the management of environmental resources and the investment climate, and enhancing social protections and livelihoods for vulnerable groups, including small and medium enterprises, women, and youth.
Patricia Laverley, the AfDB’s Tanzania country manager, highlighted the significance of the loan, stating, ‘This operation will allow the bank to deepen policy dialogue with other development partners on domestic resource mobilisation; public financial management reforms; strengthening anti-money laundering and counter-terrorist financing measures; industrial development and competitiveness; as well as strengthening social protection through reprioritisation of public expenditures in Tanzania.’
While the bank has supported Tanzania in implementing reforms that have enhanced its attractiveness for business and investment over the past decade, the country’s fiscal progress is now facing challenges due to global economic headwinds. The average g
rowth rate, which was close to 7 percent before the pandemic, is estimated to have slowed to 4.8 percent in 2022.
The ECSIP is expected to directly benefit various government ministries and entities, including the Ministry of Community Development, Gender, Women, and Special Groups, as well as the Revenue and Public Procurement Regulatory Authorities. Moreover, businesses across mainland Tanzania and Zanzibar will gain access to increased investment opportunities to facilitate their expansion.
The ECSIP aligns with the African Development Bank’s Tanzania Country Strategy Paper 2021-2025, its Ten-Year Strategy through 2023, the Strategy for Economic Governance in Africa (2021-2025), and the Climate Change and Green Growth Action Plan (2021-2025).
As of February 28, 2023, the African Development Bank’s portfolio in Tanzania comprised 21 sovereign and three non-sovereign operations, with total commitments amounting to $2.65bn. The majority of these operations, accounting for 86 percent, are in the infrastructure sector, particularly energy, transport, and water and sanitation.
